Legal Rights of Home Buyers

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A home buyer has important legal rights that protect him from fraud and misrepresentation during the sale. Getting a mortgage, for example, is typically one of the biggest loans a consumer gets, according to the U.S. Department of Housing and Urban Development. If a home buyer knows his rights, it helps him stay informed and spot suspicious charges. The rights of a home buyer cover various features of the sale and come from both state and federal laws.

Loan Disclosures

  • A home buyer getting a mortgage has the right to full disclosure of the loan terms, rates and penalties in writing under the Truth-in-Lending Act, a federal law that protects consumers from misinformation when getting a loan. The buyer must receive the estimated amount she will pay in interest over the loan term, the annual interest percentage rate and the total number of payments and the payment amounts.

Seller Disclosures

  • The buyer must receive a seller's disclosure statement. The statement lists house defects the seller knows of. What a seller must disclose and his liability for items he did not state depends on state laws. Seller disclosures commonly include problems that cannot be observed by simply looking at the home and other significant issues that were documented during inspection. The buyer has the right to sue a seller who knowingly failed to disclose a major problem with the house on the statement in some cases.

Equal Opportunity

  • The Equal Opportunity Credit Act forbids lenders from not giving a loan to a buyer based on discriminatory characteristics, such as color, marriage status and age. A qualified buyer has the right to a home loan regardless of factors covered under the laws.

    The buyer has the same rights regarding other people involved in the sale. The seller and any agent of the seller cannot refuse to sell her the home because of her gender, race, age, martial status, religion, place of birth or because she receives public assistance. A real estate agent cannot refuse to help a buyer for discriminatory reasons.

Considerations

  • The Real Estate Settlement Procedures Act gives buyers rights during the loan closing. The buyer receives an estimate of the amount of money needed to complete the sale -- referred to as "closing costs" -- and an itemized statement showing each closing fee is.

    A buyer has the right to a free copy of his credit report from a credit bureau used during his loan application if his request is denied based on the report. The copy allows him to see negative items that cost him the home financing.

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